Maryland health reform council adjusts insurance plan model

Maryland’s Health Care Reform Coordinating Council shifted gear on Monday about which existing health plan to use as the model for future insurance plans in the private market.

The council voted Monday to use the insurance plan designed for small businesses as the model for all private market health plans beginning in 2014 after receiving new guidance from the federal government on the rules for essential health benefits. The state is required under the federal Affordable Care Act to establish essential health benefits — benefits that all private health plans sold to small groups and individuals will be required to include beginning in 2014. The council had previously chosen the state employee plan as the benchmark because it offered more benefits, most notably in vitro fertilization.

The council in September grappled between the state plan and the small group plan because they are very similar. The main difference is that the state plan offers a few extra benefits than the small group plan. The small group plan would likely have been a cheaper option, but council members feared that if a benefit was not part of the essential package that it could fall through the cracks.

Now, new federal guidelines say that the state can mandate additional benefits on top of the essential benefits package. That means the state can use the less expensive small group plan and add on requirements for extra benefits, like in vitro fertilization, to the individual market.

“We felt the new guidance gave us a new opportunity to thread the needle between our goal of putting in place a robust set of benefits for Maryland but at the same time to promote stability,” said Carolyn Quattrocki, executive director of the Governor’s Office of Health Care Reform.

Following other new federal guidelines, the council decided to use the federal employee health plan’s behavioral health benefit as the state benchmark.

Insurers will use the essential benefits package as a blueprint when designing their health plans. Using the small group plan could cut down on costs to consumers because most carriers already offer those plans for small businesses. Comparatively, carriers would be starting from scratch building plans based on the state employee plan.